a carefully researched scoop on news not usually available on any other media channel or in many cases noted before it appears in conventional media from an insiders perspective. The views are that of the author and are not guided by any other person or organization. A truly unique and independent opinion of SRI LANKA TODAY

Saturday, May 14, 2016

Is it due to the new Government’s
emphasis on cleaning up the stables, making itself known to the world, that
there is a collective wish on the part of the people reflected in the mandate
given to the Government that is also reflected in this renewed call to join
this elite club?

It is important that this is seen as the
start of a long road in ensuring equity in tax yield where those who can pay a
fair share, in a Country that has one of the most regressive taxation
environments in the world.

Hardly any of the top 1,000 wealthy
people in Sri Lanka pay more than a minimum tax of less than Rs500,000 per
annum, when in fact their incomes require them to pay at least 10 times
that, on direct taxation rates, (15%) which are one of the
lowest in the world.

Essential Food in Sri Lanka is taxed
very heavily, namely sugar and flour as the Govt. revenue for the most part is
collected on imports, including food items, and from taxes on liquor and
tobacco, all consumed by the lower middle classes as a percentage of disposable
income.

The main plan of this global
transparency initiative is to equitably tax income and gains, and until people
who are high earners are brought into the direct taxation net, such as doctors,
lawyers, tuition factory owners/teachers, Parliamentarians who sell their car
permits for Rs40M and don’t pay tax on this gain, Car Dealers, and Hardware
Merchants, there is no equity in tax.

It is the DUTY of this Govt. to
unashamedly pursue the obvious channels of raising taxes, rather than the tried
and tested method of going after those who actually pay taxes and try and find
out if they can squeeze more out of them, by unfavorable tax assessments devoid
of any reasonableness in calculation.

Let us hope this initiative yields the
desired results in collecting taxes that have long been left uncollected and
therefore being of unreasonable benefit to the earner at the expense of the
state.

Let us not forget that the state is made up of the people of the
Country, and it is the duty of the state to ensure that there is fairness in
taxation, something severly lacking in Sri Lanka, that when compared with
Countries the world over is more like a massive tax haven for the rich who ride
around flaunting their wealth. Less than 1% of the people in Rs10M vehicles
have a tax file, while 95% of direct tax payers don’t have that value of
vehicle!